Homeowners are being “unfairly punished”, a St Helens MP has said as Labour announces plans to reform the controversial leasehold system.
Labour estimates that between 4.3 and 6.6 million properties in England are owned on a leasehold basis, equating to one in four of all homes.
Owning a leasehold property means you own the right to live in the property but do not own the land it sits on.
Last month the government announced it was to ban leaseholds on all new-build houses, although it has not said when this will take effect.
The Ministry of Housing, Communities and Local Government said all new houses will be sold on a freehold basis and ground rents on new leases will be reduced to zero.
However, in a report released on Tuesday, Labour said the Tories’ proposals are “too weak, too slow and almost entirely overlook existing leaseholders”.
Labour has now unveiled its own plans for a “leasehold revolution”, vowing to end the sale of new private leasehold houses and flats and crack down on the controversial practice.
Marie Rimmer, MP for St Helens South and Whiston, said the current leasehold system “unfairly punishes” leaseholders, particularly those buying new properties
“Almost 37 per cent of houses sold in my constituency were leasehold, many with extortionate fees and restrictive contract terms, with no way to easily challenge them,” Ms Rimmer said.
“It is truly heartbreaking to see families put to the financial breaking point.
“Labour will end ground rents for new leasehold homes, and cap ground rents for existing leaseholders at 0.1 per cent of the property value, up to a maximum of £250 a year.
“Labour will crack down on unfair fees and contract terms by publishing a reference list of reasonable charges, requiring transparency on service charges and giving leaseholders a right to challenge rip-off fees and conditions or poor performance from service companies.
“It will also improve and revitalise commonhold for flats, and make freehold mandatory for all new houses, as the Conservatives should have done years ago, helping millions of people across the UK.”
The announcement has also been welcomed by Newton Labour councillor Seve Gomez-Aspron, who has praised the national arm of the party for taking a “strong stance”.
Coun Gomez-Aspron and fellow Newton councillor Jeanie Bell recently met with St Helens North MP Conor McGinn in Westminster to the controversial practice, which he said is widely utilised in Newton-le-Willows.
“A couple of years ago, the Labour group took a motion to council to condemn unscrupulous leasehold management firms, so it’s great news to see the national party take such a strong stance,” Coun Gomez-Aspron said.
“In my hometown of Newton-le-Willows, almost every house built since the 1990s is leasehold, leaving residents vulnerable to unfair and excessive charges.
“Councils don’t have the power to regulate it, but thankfully, a future Labour government can.”
Labour will now consult on a number of measures aimed at cracking down on the sale of leaseholds.
Shadow Housing Secretary John Healey said the consultation document sets out Labour’s ambition to end the “broken leasehold model for good”.
“Leasehold is a symbol of our broken housing system, with millions of England’s homeowners feeling like they’ve bought their home but still don’t own it.
“The scale of the problems faced by leaseholders, from rip-off ground rents to punitive fees to onerous contract conditions stating what they can and can’t do to their own homes, demands wholesale change.
“We need a revolution in rights for leaseholders.
“This consultation document sets out the next Labour government’s ambition end the broken leasehold model for good.”